Iron-sulfur (Fe-S) clusters are widely distributed protein cofactors that are vital to cellular biochemistry and the maintenance of bioenergetic homeostasis, but to our knowledge, they have never been identified in any phosphatase. Here, we describe an iron-sulfur cluster in Asp1, a dual-function kinase/phosphatase that regulates cell morphogenesis in Schizosaccharomyces pombe. Full-length Asp1, and its phosphatase domain (Asp1(371-920)), were each heterologously expressed in Escherichia coli. The phosphatase activity is exquisitely specific: it hydrolyzes the 1-diphosphate from just two members of the inositol pyrophosphate (PP-InsP) signaling family, namely, 1-InsP7 and 1,5-InsP8. We demonstrate that Asp1 does not hydrolyze either InsP6, 2-InsP7, 3-InsP7, 4-InsP7, 5-InsP7, 6-InsP7, or 3,5-InsP8. We also recorded 1-phosphatase activity in a human homologue of Asp1, hPPIP5K1, which was heterologously expressed in Drosophila S3 cells with a biotinylated N-terminal tag, and then isolated from cell lysates with avidin beads. Purified, recombinant Asp1(371-920) contained iron and acid-labile sulfide, but the stoichiometry (0.8 atoms of each per protein molecule) indicates incomplete iron-sulfur cluster assembly. We reconstituted the Fe-S cluster in vitro under anaerobic conditions, which increased the stoichiometry to approximately 2 atoms of iron and acid-labile sulfide per Asp1 molecule. The presence of a [2Fe-2S](2+) cluster in Asp1(371-920) was demonstrated by UV-visible absorption, resonance Raman spectroscopy, and electron paramagnetic resonance spectroscopy. We determined that this [2Fe-2S](2+) cluster is unlikely to participate in redox chemistry, since it rapidly degraded upon reduction by dithionite. Biochemical and mutagenic studies demonstrated that the [2Fe-2S](2+) cluster substantially inhibits the phosphatase activity of Asp1, thereby increasing its net kinase activity.